All Nigerians and non-residents will be required to possess a Tax Identification Number (Tax ID) to open or operate bank accounts from January 1, 2026. The new requirement is contained in the Nigeria Tax Administration Act, 2025, recently signed into law by President Bola Tinubu.

Section 8 (2) makes Tax ID mandatory for any person to operate a bank account or get involved in insurance, stocks or allied services in the country, once the Act comes into force from January 1, 2026. “A person engaged in banking, insurance, stock-broking, or other financial services in Nigeria shall ensure that every taxable person provides a Tax ID,” the law reads.

The legislation extends beyond banking services to cover various financial activities. Section 8 makes it a prerequisite for entering into contracts with federal and state governments, while also requiring it for operating bank accounts or engaging in financial services once the law takes effect.

The Act includes provisions for non-residents conducting business in Nigeria. Under Section 6(1), non-residents who supply taxable goods and services to Nigerians are obligated to register and pay tax, making them subject to the Tax ID requirement.

“A non-resident person that supplies taxable goods or services to any person in Nigeria, or derives income from Nigeria shall register for tax purposes and obtain a Tax ID”

To ensure widespread compliance, Section 7(3) empowers tax authorities to assign a Tax ID to individuals or entities who fail to register. The new law is expected to significantly impact Nigeria’s financial sector as banks and other financial institutions will need to verify Tax ID compliance before providing services to customers.

For businesses that cease operations, temporary or permanent, the Act provides flexibility in managing Tax ID status. The Act, however, provides an allowance to suspend or deregister the Tax ID, if the holder is no longer engaged in taxable activities.

“Where a taxable person temporarily ceases to carry on a trade or business in Nigeria, the taxable person shall notify the relevant tax authority of its intention to suspend its registration for tax purposes within 30 days of such temporary cessation of trade or business,” the law states.

The legislation represents a major step in the Federal Government’s efforts to expand the tax net and improve revenue collection. Industry analysts suggest the move could significantly boost tax compliance rates across the country.

Financial institutions are expected to begin preparing systems and processes to accommodate the new requirements ahead of the January 2026 implementation date.